Tanzania's external debt stock totaled USD 35,385.5 million at the end of October 2025, reflecting a modest 0.7% monthly decrease from September's USD 35,438.3 million, primarily due to net amortizations exceeding new disbursements (USD 220.5 million service vs. USD 89.9 million loans). As of December 14, 2025, this remains the latest detailed breakdown available from the Bank of Tanzania's (BoT) November 2025 Monthly Economic Review; preliminary November estimates suggest stability around USD 35,400 million (minor +0.04% from multilateral inflows), with no significant shifts reported in subsequent updates. The portfolio is predominantly concessional (average grant element ~45%, interest 3.2%), supporting moderate debt distress risk per IMF assessments.

Economic Implications: The contained stock (69.5% of total national debt, ~25% of GDP) leverages low-cost financing for productive investments, contributing 1-2% to annual GDP growth via infrastructure and social multipliers while preserving fiscal space (service at 12% of exports). Government dominance ensures public goods alignment with Vision 2050 (upper-middle-income by 2050), but private sector growth (18.3%) signals FDI maturity—potentially adding 0.5% GDP via spillovers in trade/manufacturing. Negligible public corporations share minimizes quasi-fiscal risks, enhancing stability amid 6.2% projected growth, though reliance on external funds exposes to global rate cycles (Fed policy impacts commercial 35.2%). Read More: Tanzania External Debt at USD 35.44 Billion

1.1 Table — External Debt by Borrower

Source: BoT November 2025 Review; provisional data.

Interpretation:

• The Government holds the largest portion (over 80%): Reflects strategic borrowing for budget support and projects (e.g., USD 443 million net disbursements YTD for infra/social).
• The private sector covers 18.3%: Mostly trade credits and bank loans, up ~12% YoY, tied to FDI in mining/tourism.
• Public entities account for a negligible share: Minimal parastatal borrowing post-reforms.

Economic Implications: Government skew (81.7%) channels funds to high-multiplier sectors (e.g., social services boosting human capital, +0.8% long-term GDP per World Bank models), fostering inclusive growth and poverty reduction (26.4% rate). Private rise diversifies risks, supporting non-gold exports (+15.2%) and jobs (200K in services), but concentrates fiscal contingency—revenue shortfalls (13.1% GDP tax ratio) could elevate service (USD 2.1 billion annually), crowding out 0.3-0.5% private investment if guarantees called.

2. Disbursed Outstanding Debt by User of Funds

The Disbursed Outstanding External (DOE) debt—excluding undisbursed commitments—stood at USD 31,385.5 million (88.7% of total external), allocated across sectors to prioritize development goals. This portion represents actively utilized funds, with social services leading due to multilateral priorities (e.g., IDA/World Bank health/education loans).

2.1 Table — External Debt by User of Funds

Source: BoT November 2025 Review; DOE focus.

Interpretation:

• Social services absorb the largest share (34.7%): Prioritizes human capital (e.g., water/education projects).
• Heavy investment in energy/mining (22.1%) and transport (17.8%): Supports industrialization and connectivity.
• Agriculture’s share is small (5.4%): Despite 24% GDP contribution, reflecting underinvestment relative to potential.

Economic Implications: Allocation to social (34.7%) enhances human development (HDI gains, +1-2% long-term productivity), reducing inequality (Gini 40.4) and poverty via education/health spillovers. Productive sectors (energy/mining/transport ~60%) drive multipliers: energy adds 1.2% GDP (hydropower), transport boosts trade (+15.2% exports under AfCFTA, USD 1 billion potential). Low agriculture share risks food security (inflation driver 7.4% October) and rural jobs (65% employment)—increasing to 10% could add 0.5-1% GDP via value chains, per Deloitte 2025. Overall, productive use sustains moderate distress risk, aligning with 6% growth, but sector imbalances highlight diversification needs amid climate vulnerabilities (1% GDP annual losses).

3. Currency Composition of External Debt (October 2025)

The portfolio is heavily USD-tilted, with diversification to EUR/SDR for multilateral exposure; no major shifts reported through November.

3.1 Table — External Debt by Currency

Source: BoT November 2025 Review.

Interpretation:

• USD dominance (65.7%): Ties to global markets; sensitive to USD strength.
• EUR/SDR (26.3% combined): Multilateral buffer.
• Appreciation of the Tanzanian shilling in 2025: Reduces TZS equivalent (~9.5% savings YoY).

Economic Implications: High USD exposure (65.7%) amplifies shilling gains (TZS 2,463/USD Dec 14), saving TZS 2.5-3 trillion in servicing and easing non-food inflation (2.1%). Diversification (EUR/SDR/CNY ~30%) hedges risks, supporting reserves (4.7 months) amid Fed easing. However, USD volatility could add 0.5% to CPI/debt service if reversing—BoT forwards mitigate, preserving 3.4% inflation and 6% growth, but full hedging (to 50% USD) could enhance resilience, per Afreximbank.

4. Summary of Key Insights

4.1 Debt Stock by Borrower

• Government: 81.7% (public investment focus).
• Private sector: 18.3% (FDI-linked growth).
• Public corporations: ~0% (reform success).

4.2 Debt Use by Sector

• Largest: Social services (34.7%), Energy & mining (22.1%), Transport & telecom (17.8%).
• Agri low (5.4%): Underinvestment risk.

4.3 Currency Composition

• USD two-thirds (65.7%); EUR/SDR key diversifiers (26.3%).

Overall Economic Implications: October's USD 35.4 billion external debt (stable through November) is productively allocated (social/productive ~75%), fueling human capital and infra for 6.2% growth and reserves buildup. Government/private balance supports inclusivity/FDI, while currency mix + shilling strength curbs costs/inflation—sustaining moderate risk (IMF). Yet, USD dominance and agri lag pose vulnerabilities (climate/FX shocks ~1% GDP); prioritizing agri (to 10%) and hedging could unlock 0.5-1% additional growth, aligning with AfCFTA/USD 10 billion potential by 2030 (World Bank 2025).